Minnetonka, Minn.-based diversified food processor and distributor Michael Foods has signed an Asset Purchase Agreement with Canadian Inovatech to acquire its egg products assets through Michael Foods’ wholly-owned Canadian subsidiary, MFI Food Canada.
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The assets, which include customer lists and egg processing equipment, are expected to generate about C$70m (US$44.8m) in sales this year. Michael Foods will also enter into long-term leases for two plants presently operated by Canadian Inovatech.
Abbotsford, BC-based Canadian Inovatech is also a one-third partner in a Canadian joint venture, Trilogy Egg Products, along with Michael Foods and The Egg Producers Co-op, a group of Manitoba-based egg producers. Hence, upon the completion of the asset purchase, Michael Foods will own two-thirds of Trilogy Egg Products. Trilogy produces and markets value-added egg products in Canada.
Michael Foods’ chairman, president and CEO, Gregg A. Ostrander, said: “I have strong respect for Inovatech and what they have accomplished in the egg products market. Together we will be well positioned to service and support our major customer base across the US. Canadian Inovatech is also a leading exporter of value-added egg products, which will open new doors for Michael Foods’ Egg Products Co internationally.”
Canadian Inovatech’s president, J. Hugh Wiebe, will be president of Inovatech Egg Products after the acquisition is closed. Wiebe said: “Canadian Inovatech is Canada’s largest egg processor. With this partnership, we will be coupling Michael Foods’ market leadership with our strengths in the marketing of value-added specialty egg products for the industrial market. This will allow us to broaden our focus.”
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By GlobalDataTerms of the pending cash purchase were not disclosed, although a late August closing is expected. The new division will continue under the name Inovatech Egg Products.
